WASDE Report for 10/11/12

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OILSEEDS: U.S. oilseed production for 2012/13 is projected at 88.2 million tons, up 6.2 million from last month. Soybean production is forecast at 2.860 billion bushels, up 226 million based on higher harvested area and yield. Harvested area is raised 1.1 million acres to 75.7 million. The soybean yield is projected at 37.8 bushels per acre, up 2.5. Soybean supplies for 2012/13 are projected 10 percent above last month on both increased production and beginning stocks. Peanut and cottonseed production are also projected higher this month. U.S. soybean exports for 2012/13 are raised 210 million bushels to 1.265 billion reflecting increased supplies, lower prices, and the record pace of export sales through early October. Soybean crush is raised 40 million bushels to 1.540 billion mostly due to increased soybean meal exports and increased soybean supplies. Soybean crush is also supported by an increase in domestic disappearance of soybean oil which reflects the impact of the increase of the biodiesel mandate for 2013 recently announced by the Environmental Protection Agency.

Soybean ending stocks are projected at 130 million bushels, up 15 million from last month. Prices for soybeans and products are all reduced this month. The U.S. season-average soybean price range for 2012/13 is projected at $14.25 to $16.25 per bushel, down $0.75 on both ends of the range. The soybean meal price is projected at $470 to $500 per short ton, down $15 on both ends of the range. The soybean oil price range is projected at 53 to 57 cents per pound, down 1 cent on both ends. Global oilseed production for 2011/12 is projected at 457.7 million tons, up 4.6 million from last month as higher soybean and cottonseed production more than offset reduced rapeseed

Global soybean production is projected at 264.3 million tons, up 6.2 million mostly due to an increase for the United States. A small increase for India soybean production is offset by a small reduction for Canada based on the latest survey information from Statistics Canada. Rapeseed production is reduced for Canada based on lower yields reported in the most recent survey from Statistics Canada. Early excess moisture resulted in delayed planting which was followed by dry conditions and heat during flowering, leading to the lowest yields since 2007. Rapeseed production is also reduced for Australia. Other changes include increased cottonseed production for China, India, and Pakistan. Revisions to the world 2012/13 oilseeds estimates include reduced soybean exports for Brazil and Argentina, increased soybean imports for China and Mexico, and increased soybean crush for Argentina, China, and Mexico.

Lower rapeseed exports for Canada and Australia are partly offset by reduced imports for several countries including China, EU-27, Japan, and Mexico. Global oilseed stocks for 2012/13 are increased 3.6 million tons to 64 million. Soybeans account for most of the change, with higher stocks in Argentina, Brazil, China, and the United States. SUGAR: Projected U.S. sugar supply for fiscal year 2012/13 is increased 122,000 short tons, raw value, compared with last month, due to higher carry-in stocks and a small increase in imports from Mexico. The increase in 2011/12 ending inventories is a result of higher-thanexpected production and lower total use more than offsetting lower imports. These 2011/12 changes are mainly the result of end-of-year final estimates. For 2012/13, U.S. exports are increased 25,000 tons, in line with an increase in Mexico's imports. For Mexico, higher 2012/13 carryin stocks and imports are nearly offset by higher expected deliveries of sugar for the products re-export program.

WHEAT: Projected U.S. wheat ending stocks for 2012/13 are lowered 44 million bushels as higher feed and residual disappearance more than offsets a reduction in projected exports. Production for 2012/13 is raised 1 million bushels based on the latest estimate from the September 30 Small Grains report. Feed and residual use is projected 95 million bushels higher reflecting the September 1 stocks that indicated higher-than-expected June-August disappearance. Exports are lowered 50 million bushels on the pace of shipments and sales to date and stronger expected competition. Export projections are lowered for Hard Red Winter and Soft Red Winter wheat. The projected range for the 2012/13 season-average farm price is narrowed 15 cents on both ends to $7.65 to $8.55 per bushel. Small revisions to 2011/12 feed and residual disappearance and seed use reflect recent updates to stocks and acreage.

Global wheat supplies for 2012/13 are projected 6.2 million tons lower mostly reflecting lower production for Australia, Russia, and EU-27. Production for Australia is lowered 3.0 million tons as a continuation of dryness through September during critical flowering and grain fill stages has reduced yield potential for this year's crop. Production for Russia is lowered 1.0 million tons reflecting the latest harvest reports that indicate lower yields and harvested area for spring wheat. Production is lowered 0.8 million tons for EU-27 mostly reflecting a reduction for the United Kingdom where excessive harvest-time rainfall has reduced production. Other EU-27 country changes were smaller and mostly offsetting.Production is also reduced for Uruguay, Canada, Algeria, and Kyrgyzstan, each down 0.3 million tons based on the latest indications from government sources. Also reducing 2012/13 supplies this month is a 0.5-million-ton reduction in global beginning stocks mostly on higher 2011/12 exports for Australia.

Upward revisions for 2010/11 and 2011/12 Argentina production partly offset the Australia reduction. Global wheat consumption for 2012/13 is lowered 2.4 million tons as higher feed and residual use in the United States, Canada, and EU-27 is offset by lower wheat feeding for Russia, lower food use for India, and the reduction in Thailand and Vietnam consumption driven by reduced Australia production and exports. Australia exports are lowered 3.0 million tons for the 2012/13 local October-September marketing year and raised 1.0 million tons for the 2011/12 local year. Most of the reduction for 2012/13 is expected after June 2013 maintaining substantial competition for U.S. exports during the remainder of the 2012/13 June-May U.S. marketing year. Argentina 2011/12 exports are also raised 0.6 million tons for the local DecemberNovember marketing year further adding to pressure on U.S. exports during 2012/13.

Global wheat exports for 2012/13 are lowered 4.0 million tons with the Australia and U.S. reductions, and reductions of 1.0 million tons and 0.5 million tons, respectively, for EU-27 and Canada. Increases of 1.0 million tons each for India and Russia are partly offsetting. Smaller export changes include a 0.3-million-ton reduction for Uruguay and a 0.2-million-ton increase for Mexico. World ending stocks for 2012/13 are projected 3.7 million tons lower mostly reflecting reductions for Australia, the United States, and Russia.
COARSE GRAINS: U.S. feed grain supplies for 2012/13 are projected lower with reduced carryin and production this month. Corn beginning stocks for 2012/13 are lowered 193 million bushels based on the September 1 stocks estimate. Sorghum beginning stocks are lowered 4 million bushels also on the September 1 stocks. Forecast corn production for 2012/13 is lowered 21 million bushels with higher area more than offset by lower yields.

The U.S. corn yield is forecast at 122.0 bushels per acre, down 0.8 bushels from the previous month. Lower yields in Illinois are only partly offset by increases for Minnesota and North Dakota. Forecast sorghum production is raised 6 million bushels with higher yields for Texas and Arkansas. For 2012/13, corn supplies are projected 214 million bushels lower and sorghum supplies are projected 2 million bushels higher. Barley supplies are down 6 million bushels with a small production decline from the Small Grains report and a 5-million-bushel reduction in projected imports with a smaller crop in Canada. Oats supplies are down with a 3-million-bushel reduction in output, also from the Small Grains report. U.S. corn use for 2012/13 is lowered with a 100-million-bushel reduction in projected exports. Corn exports are lowered based on the slow pace of sales to date and strong competition from Brazil.

Corn ending stocks for 2012/13 are projected 114 million bushels lower at 619 million. Projected ending stocks are raised slightly for sorghum, but lowered for oats. Barley ending stocks are projected 19 million bushels higher reflecting a 25-million-bushel reduction in expected feed and residual use based on indications from the September 1 stocks. The season-average farm price for corn is lowered 10 cents on both ends of the range to $7.10 to $8.50 per bushel based on early season cash and futures prices and prices available for forward delivery through early 2013. Global coarse grain supplies for 2012/13 are projected 11.0 million tons lower mostly reflecting reduced corn beginning stocks in the United States and Brazil. Brazil beginning stocks are lowered with 2011/12 exports increased 4.5 million tons. Global corn production for 2012/13 is lowered 2.0 million tons with reductions for EU-27, Serbia, and the United States. Global sorghum production is raised 0.7 million tons with small increases for Australia, the United States, and several African countries.

Global rye production is raised 0.5 million tons with an increase for EU-27. Offsetting these increases is a 1.8-million-ton reduction in world barley output mostly on smaller crops in Australia and Canada, and a 0.5-million-ton reduction for oats with a smaller crop in Australia. Global 2012/13 corn exports are lowered 1.1 million tons this month with the U.S. reduction partly offset by a 1.0-million-ton increase for Brazil and a 0.5-million-ton increase for India. Imports for EU-27 are raised 2.0 million tons with the smaller crop. Global corn feeding is down 1.4 million tons. Corn and sorghum food use is raised this month for several African countries where these grains remain a staple food. Global barley feeding is lowered with reductions for Australia, Canada, EU-27, and the United States. Barley feeding is raised for Saudi Arabia. Global coarse grain ending stocks for 2012/13 are lowered with projected corn ending stocks down 6.7 million tons on reductions for Brazil and the United States.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2013 red meat and poultry production is raised slightly as higher pork and poultry production more than offsets lower beef production. Lower expected cattle placements in the third quarter will manifest itself as slightly lower supplies of fed cattle in early 2013. The recent Quarterly Hogs and Pigs report estimated a small decline in the June-August pig crop and indicated that producers intend to reduce farrowings through early 2013, but it is expected that continued growth in pigs per litter will mitigate much of the decline in farrowings. The forecast for 2013 poultry production is raised slightly. For 2012, the total meat production forecast is reduced on lower beef and broiler production forecasts, although pork and turkey are forecast higher. Egg production is forecast higher for both 2012 and 2013 based on hatchery data.

Beef imports are reduced for 2012 based on a slower pace of imports from Canada, but are unchanged for 2013. Beef exports are unchanged for 2012 and 2013. Pork exports are unchanged for 2012, but are raised slightly on expected late 2013 improvements in sales. Imports are reduced slightly for 2013. Poultry export forecasts are unchanged for both 2012 and 2013. Only small changes are made to 2012 livestock and poultry prices, generally reflecting small adjustments to fourth-quarter prices. Cattle and hog prices for 2013 are unchanged, but the broiler price is tightened at both ends of the range and the turkey price is lowered at the high end of the range. The 2012 milk production forecast is reduced from last month, as slower growth in milk per cow more than offsets a slower expected decline in cow numbers. Higher forecast milk prices in late 2012 and into 2013 are expected to slow the rate of decline in cow numbers and help support higher growth in milk per cow in 2013. Thus, the production forecast for 2013 is raised. Imports WASDE-511-5 are forecast higher for both 2012 and 2013. Fat basis exports for 2012 are lowered but skimsolids exports are forecast higher. Exports for 2013 are unchanged from last month. Product prices are forecast higher for 2012 and 2013 as recent strength in dairy product demand is expected to carry into 2013. Forecasts for butter, cheese, nonfat dry milk, and whey are raised from last month. With higher product prices, both the Class III and Class IV price forecasts are raised. The all milk price is forecast at $18.50 to $18.60 per cwt for 2012 and $19.00 to $19.90 per cwt for 2013.

COTTON: This month's 2012/13 U.S. cotton supply and demand estimates include slight revisions, resulting in an increase of 300,000 bales in forecast ending stocks. Production is raised 178,000 bales from last month to 17.3 million, due mainly to increases in the Mississippi Delta states. Domestic mill use is unchanged, but exports are reduced based on lower forecast imports by China. The forecast range for the 2012/13 marketing year average price received by producers of 62 to 74 cents per pound is lowered 4 cents on the upper end of the range, reflecting lower prices in recent months. In addition, the final 2011/12 marketing year average price is pegged at 88.3 cents per pound.

A combination of sharply higher production and reduced consumption raises projected 2012/13 world ending stocks by 2.6 million bales this month. Production is raised mainly in India, China, Brazil, Pakistan, and the United States. Consumption is reduced 2.0 million bales for China as the high domestic support price continues to erode offtake. However, about three-fourths of the China reduction is offset by increased spinning use in other countries with access to lower cost raw material, including India, Turkey, Pakistan, Indonesia, Taiwan, and Vietnam. World trade is reduced marginally as a reduction of 1.0 million bales in China's imports is mostly offset by increases for other countries. World stocks are raised to 79.1 million bales, including 37 million bales projected for China.

RICE: U.S. rice production in 2012/13 is forecast at 198.9 million cwt, up 2.5 million from last month with the increase entirely due to higher yield. The average all rice yield is a record at 7,428 pounds per acre, up 94 pounds from last month. Yields are raised in all States but Missouri where the yield is unchanged from a month ago. Record yields are forecast for Arkansas, Louisiana, and Texas. Harvested area is unchanged at 2.68 million acres. Both long-grain and combined medium- and short-grain rice production are raised from last month, with long-grain production projected at 140.1 million cwt and combined medium-and short-grain production at 58.8 million. The all rice import forecast is unchanged at 19.5 million cwt. Domestic and residual use for 2012/13 at 127.0 million cwt is up 1.0 million from a month ago.

Total rice exports are projected at 100.0 million cwt, unchanged from last month. All rice ending stocks are projected at 32.4 million cwt, up 1.5 million from last month. The 2012/13 long-grain season-average farm price range is projected at $13.20 to $14.20 per cwt, up 70 cents on each end of the range from last month. The combined medium- and shortgrain farm price range is projected at $16.50 to $17.50 per cwt, unchanged from a month ago. The all rice season-average farm price is forecast at $14.20 to $15.20 per cwt, up 50 cents on each end of the range. Long-grain rice prices will be supported in part by expected stronger prices among South American competitors including Argentina, Brazil, and Uruguay. Competition in the medium-grain market is expected to be stronger as the U.S. will face competition from both Egypt and Australia for limited international markets. Egypt lifted the rice export ban as of October 1, 2012. Australia's 2012/13 rice area is expected to expand by 11 percent from the previous year as irrigation supplies are plentiful.

Global total use of rice for 2012/13 is raised more than the increase in total supplies resulting in a slight decline in world ending stocks. World rice production is raised 0.9 million tons to a record 465.1 million, up slightly from the previous year. The boost in production is due mostly to a 1.0-million-ton increase in India's crop to 99.0 million tons. Favorable late-season monsoon rains in India's eastern and northeastern rice areas benefitted kharif rice. Additionally, the late season rains should also benefit India's rabi rice crop. Rice crops are also increased in Australia, Egypt, Japan, and the United States, and dropped in Uruguay and several SubSaharan African countries. Global consumption is raised 0.9 million tons to a record 468.6 million, with most of the increase in China, India, and Nigeria, partially offset by decreases for Bangladesh, Egypt, and Tanzania. Global exports are raised 0.4 million tons, with increases for Egypt and India, partially offset by reductions for China and Uruguay. Imports are raised for Sub-Saharan Africa and the Middle East. Global 2012/13 ending stocks are projected at 102.0 million tons, down 0.3 million from last month, and 3.5 million below 2011/12. Forecast ending stocks are lowered for Bangladesh and India, but increased for Nigeria.

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